13.1 (a) The Contractor shall, on the date of the possession of Site, provide a Performance Bond or Performance guarantee Sum as the case mayh be substantially in the form as in Appendix issued by an approved licensed bank or financial institution incorporated in Malaysia in favour of the Government for a sum equivalent to five percent (5%) of the total Contract Sum as specified in Appendix to secure the due performance of the obligations under this Contract by the Contractor. The Performance Bond shall remain valid and effective until twelve (12) months after the expiry of the Defect lIability Period of the issuance of the Certificate of Completion of Making Good Defects, whichever is the later.
(b) If the Contractor fails to sub,mit the said Performance Bond as specified in sub-clause (a) above on the date of posession of site, then the Contractor shall be deemed to have opted for on the date of possession of site, then the Contractor shall be deemed to have opted for Performance Bond in the form of Performance Guarantee Sum as provided for under clause 13.2 hereof.
13.2 The Contractor may opt for a Performance Bond in the form of perfo0rmance Guarantee Sum in lieu of the Bank, Insurance or Finance Company Guarantee as specified in clause 13.1 hereof whereby deductions of ten percent (10%) shall be amde from the first interim payments and subsequent interim payment until the total amount deducted aggregate to sum equivalent to five (5) percent of the Contract Sum. The amount deducted shall be retained by the Government up to twelve (12) months after the expiry of the Defect Liability Period or the issuance of the Certificate of Complatiuon of Making Good Defects, whichever is the later.
13.3 Notwithstanding anything contained in this Contract, the Government shall be entitled at any time to call upon the Performance Bond, wholly or partially, in the event that the Contractor fails to perform or fulfil its obligations under this Contract and such failure is not remedied in accordance with this Contract.
13.4 If a payment is made to the Government pursuant to any claim uner the Performance Bond, the Contractor shall issue to the Government further security in the form of additional performance bond or bonds for an amount not less than the amount so paid to the Government on or prior to the date of such payment so that the total sum of the Performance Bond shall be maintained at all times at the value specified in clause 13.1 (a).
13.5 The Performance Bond ( or any balance thereof remaining for the credit of the Contractor ) may be released or refunded to the Contractor on the completion of making good of all defects, shrinkages or other faults which may appear during the Defects Liability Period and upon the giving of the Certificate of Completion of Making Goood Defects for the whole of the Works under clause 48.
13.6 Notwithstanding the above, in the event that this Contract is terminated under clause 51 hereof the said Performance Bond or any balance thereof shall be forfeited.
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